After a week of ups and downs with the New York Stock Exchange and the Dow Jones, one Chicago expert is telling investors not to panic because the market will rebound eventually.
Last week's manic stock market day was unsettling news for investors around the world, and in Chicago, but some experts say it’s not time to panic– yet.
Seized by fears that the Chinese economy is not as healthy as it appeared to be, investors sold with abandon at the opening bell and sent the Dow Jones industrial average down almost 1,100 points, the biggest decline on record in a trading day. Then the market staged a dramatic comeback and almost erased its losses, coming within about 115 points of break-even. By late afternoon, stocks were sinking again — and the Dow was down 588 points at the closing bell, a 3.58 percent rout.
“Chine waved the white flag and said their growth isn’t as good as they thought,” Brian Battle with Performance Trust Capital Partners said. “So there has been a selloff in Asia and it finally made it here to the U.S.”
But Steven Esposito, a senior vice president with the wealth management division of Morgan Stanley, said investors shouldn’t panic.
“What you don’t want to do is let emotion control your investment decisions,” Stanley said. “Look at your portfolio. Make sure it’s well-diversified. It may be time to upgrade a few of your positions, or pull back, but most of all, don’t panic.”
Many investors pick and choose stocks based on a company’s business outlook, but there is an entirely different class of trader that relies on technical indicators to make investment decisions. Many of their screens were flashing “sell” this week.